A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

According to the Federal Deposit Insurance Corporation (FDIC) whose member banks account for a great majority of the Helocs in effect in the United States, the dollar volume of these loans hit $531 billion in March, the last figure available, up 28 percent form $416 billion in June 2004.

According to David Barr, a spokesman for FDIC, homeowners had turned away from refinancing their primary mortgages recently because of higher interest rates. "But they keep turning to Helocs to extract cash from the equity in their homes," he says.

If the value of their house declines sharply, borrowers could wind up owing more than the house is worth. If they have to sell, they would have to pony up cash.

If you really needed to make ends meet while living in this so-called Housing Heaven, all you had to do was buy a vacation home, rental property, or second-home and proceed to “install your own ATM on the side of your financed house” with your bank’s help, of course. Who needs to work, when you can simply go to the bank and rob your own house? It’s easier than robbing the bank! Living this way is fine in Housing Heaven, but not down here on earth. Here’s why.

Consumer debt is up to $2 trillion (not including $440 billion of revolving home equity loans and $600 billion of second mortgages). Not only do consumers owe a whopping $9 trillion in mortgage debt, but home equity extraction has reached $600 billion annually. Homeowners have basically received, and spent, in excess of $2 trillion that they never earned.

"People who lived off fake money from HELOCs represent maybe 1% of the American population. "

I think it's higher than that. Maybe in your state nobody was doing it but then you go to places like Arizona, Nevada, San Diego, etc., and it seems that 100% of everyone was doing it. That's definitely skewing the total above 1% nationally.

Yep, you're right, Republicans put guns to everyone's heads and forced them to "buy" houses they knew they couldn't afford. They also forced them to "buy" H2s and Escalades on HELOCs.

People like that are stupid, that's why they want socialism. They need someone to control their lives because they are unable to control their own impulses and base instincts. Now they are flocking to Obama.

I think it's higher than that. Maybe in your state nobody was doing it but then you go to places like Arizona, Nevada, San Diego, etc., and it seems that 100% of everyone was doing it. That's definitely skewing the total above 1% nationally.

Perception vs. reality. National foreclosure rate is 1% of all homes. Yes, 50% of all homes on the market now seem to be pre-foreclosures, so that skews the perception that "everyone was doing it." But homes for sale still only represent a tiny fraction of ALL homes.

Historical national foreclosure rate is 0.5%. Now it's 1%. Hardly sounds like "everyone was doing it."

To say America is "waking up" is an exaggeration. Drops in consumer spending as a whole have numerous factors... the disappearance of HELOCs is probably a small one. It's over-simplifying a complex issue.... no different than simply saying "terrorists are against freedom."

DC area now has radio ads to train you on how to be a house flipper. Make millions. Something like - I was $100k in debt then made millions, you can too.I seem to remember the ads offering to teach me how to be a day trader back in the summer of 2001.

Anon 8:51p said:"People like that are stupid, that's why they want socialism. They need someone to control their lives because they are unable to control their own impulses and base instincts. Now they are flocking to Obama.

There are people who want freedom.

There are people who want to be controlled"

...and there are those that must control others. That would be the Republicans. We should start calling them what they are: The Controllers.

Maybe 50% of your customers who bought in the past 3-4 years. That's consistent with the fact that 50% of homes on the maket now are distress sales. But take into account that national home ownership rate is 69%. There are a whole lot of people out there who aren't customers of your bank employer. There are a lot of home owners out their that we never talk about.

All the old farts in my family who have owned for decades haven't tapped their equity.